Shilling weakens slightly after end-quarter obligation lapses

The shilling has once again depreciated following increased demand for the US dollars as the end-quarter obligation trailed off.

The shilling reverted to normal drive after the month-end tax and salaries obligations ended hence increases the corporate greenback appetite.

The Standard Chartered Bank said in a statement yesterday that the demand for the dollar has once again increased as the greenback gains strength over the shilling.

“We expect the trend to continue in a stable manner over the course of the day,” the bank said adding “price volatility still expected to remain low in the market.” Another bank, CRDB attributed the fall to increased corporate demand amid most commercial banks being caught shoot on Wednesday’s trading session.

“…The shilling depreciated against US dollar due to corporate demand… (When) the pair closed at the levels of 1605/1615, higher than the Tuesday’s close of 1603/1613,” CRDB said the statement. 

The National Microfinance Bank (NMB) said the demand for greenback was slowly resuming after the end quarter requirements among corporate trailed off.

“The local currency weakened slightly on Wednesday as demand is slowly resuming in the market and quarter end obligations lapses,” NMB said in its e-Markets. 

Tanzania Securities, a stock brokerage firm, analysis of the shilling trend since the beginning of this year shows that the local currency has depreciated by 0.24 per cent to 1,610/91 to date.

Bank of Tanzania earlier had said the current depreciation level of the shilling was a 'normal shock' which could be absorbed well by the markets without derailing the macroeconomic fundamentals.
Source: Daily News, reported by Abduel Elinaza from Dar es Salaam, Tanzania
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